GST Withholding
From 1 July 2018 purchasers of new residential premises or new residential subdivisions need to remit the GST on the purchase price directly to the ATO as part of the settlement process. The Bill (in Schedule 5) requires that where an entity (the supplier) makes a taxable supply of new residential premises or a subdivision of potential residential land by way of sale or long term lease, the recipient of the supply (the purchaser) is required to make a payment of the GST part of the consideration to the ATO directly, prior to or at the time consideration is first provided for the supply (other than as a deposit).
The Legislation passed the House of Representatives on 27 February with bipartisan support and is in the Senate.
Enforceability of insolvency event clauses in contracts entered into on or after 1 July 2018
Part 2 of the Treasury Laws Amendment (2017 Enterprise Incentives No. 2) Act 2017 (Amending Act) introduces amendments to the Corporations Act 2001 that impose a statutory stay on the enforcement of a right arising under an agreement by reason of the fact of (commonly referred to as an "ipso facto" clause) the following events or the financial position of the company related to those events:
- the appointment of a voluntary administrator;
- the appointment of a receiver or managing controller over all or substantially all of the company's property;
- the company undertaking a scheme of arrangement for the purposes of avoiding being wound up in insolvency.
The statutory stay operates by automatically switching off the ability to enforce a right, such as a right to terminate, under a contract arising from those events.
NSW - surcharge purchaser duty and surcharge land tax provisions commenced 5 March 2018
The State Revenue Legislation Amendment (Surcharge) Act 2017 commenced in respect to surcharge purchaser duty and surcharge land tax on 5 March 2018.
These provisions update s.104ZJA in the Duties Act 1997 to apply more specifically to new homes and subdivisions, to allow for exempt transferees and to extend the period for application for a refund of surcharge purchaser duty in some cases to 10 years. The new section 135 extends the operation of section 104ZJA to transfers that occur before commencement of the section.
The provisions also update section 5C of the Land Tax Act 1956 to apply more specifically to new homes and subdivisions, to allow for exemptions and to extend and clarify the period for application for a refund of surcharge land tax, being:
- 12 months after completion;
- for completions before 21 June 2016, refund applications cannot be made later than 21 June 2021; and
- all other cases, not later than 10 years after completion.
The new section 63 of the Land Tax Management Act 1956 clarifies that section 5C of the Land Tax Act 1956 applies to the 2017 land tax year and subsequent tax years.
For more information see:
KPMG report on e-conveyancing
On 19 February KPMG released its e-Conveyancing report highlighting some of the benefits of e-Conveyancing:
- time savings post exchange;
- reduction of risks associated with human error;
- some savings but also some costs;
- flexibility;
- immediate title transfer on settlement in most cases reducing the risk of later registrations; and
- access to information
NSW Land Registry Services Updates
Land Registry Services Circular No.2018/01
All new strata plans submitted with a surveyor’s certificate dated from 1 March 2018 must include a schedule of street addresses.
Addresses must be provided for:
- common property;
- each new lot in a strata plan;
- a strata plan of subdivision; and
- a strata plan of consolidation.
NSW Land Registry Services Circular No. 2018/02
Minor design changes to paper Certificates of Title were introduced in February.
Paper colour: the new Certificates of Title will be printed on a slightly different shade of paper.
Removal of the watermark: the watermark image of the NSW state boundary and the NSW waratah will no longer appear.
NSW Land Registry Services Circular No.2018/03
All standalone transfers and caveats must be lodged via PEXA from 1 July 2018.
NSW window safety locks from 13 March 2018
NSW Owners Corporations must fit window safety locks on all above ground windows to protect children from falling from unsecured windows from 13 March 2018. Eugene Tan and Amy Hayes explain the impact of these regulations here.
NSW Home Building Compensation Fund Check Tool
The new HBC Check Tool allows you to independently verify online if any building or renovation work over $20,000 has a valid insurance certificate. This could be very useful for homeowners, prospective buyers, sellers and councils.
For more information see the NSW Government website.
NSW Contracts with deposits by instalments
There may be difficulties enforcing deposits by instalments. This is particularly the case where the second (or subsequent) instalment is due on breach of the contract or on completion.
Land Use Victoria Customer Information Bulletins
Customer Information Bulletin 175
All standalone transfers (generally an unencumbered title and cash purchase) and standalone survivorships need to be completed electronically through the PEXA platform from 1 March 2018.
Change to Western Australian Registrar and Commissioner of Titles' Joint Practice: Verification of Identity and Authority - fraud mitigation
Landgate Bulletin No. 305-31 January 2018
The Western Australian Commissioner of Titles and the Registrar of Titles have updated their Joint Practice for Verification of Identity and Authority (VOI Practice) for paper-based transactions. The updated VOI Practice more closely aligns to the requirements for national electronic transactions.
The key changes to the VOI Practice:
- extend the requirement for verification of identity to property buyers and caveators lodging and withdrawing caveats;
- update the categories of documents needed to support verification of identity;
- update the procedures for conducting verification of identity in a foreign country; and
- improve the procedures for self-represented parties.
These changes came into effect on 12 February 2018 but they will not be required to be fully complied with until 5 June 2018.
ACT owners corporation recovery of legal fees set to be confirmed
The Courts and Other Justice Legislation Amendment Bill 2018, which was introduced on 22 February 2018, seeks to confirm that an owners corporation is able to recover its legal expenses where it is incurred as a result of a member's wilful or negligent act or omission, or a breach of rules. This will clarify an inconsistency between two ACAT cases, which made it unclear as to whether costs incurred by tribunal proceedings were recoverable without an ACAT order.